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Brickbat: Exit Toll
Italy has proposed a 25 per cent tax on unrealised investment gains for some wealthy residents who move their tax residence abroad. The measure is included in the proposed 2027 budget and is intended to apply when people leave Italy with substantial assets.
It would cover people with at least €800,000 in assets who have lived in Italy for six of the previous 10 years. Those moving to the EU or certain other countries could defer payment until selling their investments, but would have to pay half the tax upfront. Critics say the proposal is unclear and could deter wealthy people and businesses; it is partly modelled on France’s exit tax, but has a stricter upfront payment requirement.
In short
- Italy proposes a 25 per cent tax on unrealised gains for some departing residents.
- The measure applies above €800,000 in assets and has a residency test.
- Critics warn it could add uncertainty and discourage investment.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Supporters could argue that people who have benefited from living and investing in Italy should not be able to avoid tax on gains built up there simply by moving away before selling. A threshold and residency test focus the measure on wealthy long-term residents, while deferring most payment until a sale may limit immediate disruption; the tax could also protect public revenue and fairness between those who stay and those who leave.
The case against
Critics could argue that taxing gains that have not yet been realised can impose a bill before an investor has received the money, and the upfront payment requirement may make that burden especially difficult. If the rules are unclear or costly to comply with, wealthy residents and businesses may move elsewhere, potentially weakening investment and the tax base; a departure tax could also be seen as unfairly restricting the choice to relocate.
Explained simply
An unrealised gain is an increase in an investment’s value that has not yet been turned into money by selling it. Italy’s proposal would tax some of these gains when wealthy residents move their tax residence abroad, even if they still own the investments.
The measure is part of a proposed budget and would apply to people with at least €800,000 in assets who have lived in Italy for six of the past 10 years. Those moving to the EU or certain other countries could delay paying until they sell, but would owe half the tax upfront.
Italy is considering the measure as governments look at how to tax wealth that might otherwise leave the country. The proposal draws partly on France’s exit tax, while critics say its rules are unclear and the upfront payment could discourage wealthy people and businesses from moving to Italy.